Former ONC chief Mostashari heads ACO startup

Dr. Farzad Mostashari, former head of the Office of the National Coordinator for Health Information Technology, is starting a new firm, Aledade, to help independent primary-care physicians form accountable care organizations. The startup has $4.5 million in seed funding from venture capital firm Venrock.

Independent practices looking to form ACOs have to expend money “to hire the people, to get the agreements, to get the licenses, to do the legal work, to hire the executive director, and a medical director, practice transformation, the analytics software, the data warehousing, the EHR interfaces,” he said. “All of that takes money,” often $1 million to $2 million.

“And that's what we provide, upfront,” Mostashari said. “We get paid on the backend, if and when we generate savings.” Of those savings, Aledade will take 40%, with the providers retaining 60%.

That funding and expertise is crucial. In Mostashari's observations of ACOs, he's noticed that “If you underinvest in the ACO and population health infrastructure—the people and the technology—you're not going to succeed.”

Aledade, he says, will be “almost a turnkey solution.”

The firm's initial partners are in a four specific areas—Arkansas, Delaware, Maryland and New York City. That's purposeful, Mostashari said. The goal is to experiment with a small area, see what the commonalities are—and what needs to be tweaked—and then expand.

“We're going to be creating networks of providers who work together to deliver more coordinated care,” he said. “If we're able to generate the value for our patients, the health plans, payers, value for the doctors, then six years from now we should be the largest primary-care network in America.”

Mostashari is confident that the trend of hospital systems buying up independent practices won't unduly effect his potential market, as he estimates half of primary care is provided by independent practices.

Instead, what Mostashari sees as the primary risk facing the startup is his partners—finding and targeting the independent practices with the "will to change" and adapt to new times.

Mostashari will be joined by Mat Kendall, a former leader with the regional extension center program at ONC, who will be executive vice president; and Edwin Miller, the “key product designer for three successful cloud-based electronic health-record programs,” a news release said. Miller will be CTO of the new firm. Venrock's Bob Kocher will sit on the board of directors.